Market and Market Segmentation

Rajeev Shrestha Lecture 8 March 28, 2012

Market and Market Segmentation

Topic Outline
Market and its types
Customer-Driven Marketing Strategy Market Segmentation

Market Targeting
Differentiation and Positioning

Market
An actual or nominal place where forces of

demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, for money or barter.

Market
Markets include mechanisms or means for
determining price of the traded item, communicating the price information, facilitating deals and transactions, and effecting distribution.

The market for a particular item is made up of

existing and potential customers who need it and have the ability and willingness to pay for it.

Types of Market
Consumer Markets Business Markets Global Markets Non-Profit and Governmental Markets

Consumer Market
Companies selling mass consumer goods and

services. E.g.: soft drinks, toothpaste, television, etc

This requires getting a clear sense of their target

customers and what needs their products will meet and communicating brand positioning forcefully and creatively.

Consumer Market
Consumer marketers decide on the features,

quality level, distribution coverage and promotion expenditures that will help their brand achieve a leading position in their target market.

Business Market
Companies selling business goods and services. Business buyers buy goods and services for their

utility in enabling them to make a product or resell a product to others and they purchase products to make profits.
Businesses marketers must demonstrate how

their products will help customers to achieve higher revenue or lower cost.

Global/ International Market

Companies selling business goods and services. Business buyers buy goods and services for their

utility in enabling them to make a product or resell a product to others and they purchase products to make profits.
Businesses marketers must demonstrate how

their products will help customers to achieve higher revenue or lower cost.

Non profit and government market

Companies selling their goods to non profit

organizations such as churches, universities, charitable organizations and government agencies.

Market Segmentation
Market segmentation is the process that

companies use to divide large, heterogeneous markets into small markets that can be reached more efficiently and effectively with products and services that match their unique needs.

Market Segmentation
Segmenting consumer markets

Segmenting business markets

Segmenting international markets Requirements for effective segmentation

Segmenting Consumer Market

Geographic segmentation

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

Geographical Segmentation
Geographic segmentation divides the market into

different geographical units such as

Nations, Regions, Zones,

Districts,
Cities, Climate, Density

Demographic Segmentation
Demographic segmentation divides the market

into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality

Demographic Segmentation
Age and Life-Cycle Stage
The process of offering different products or using

different marketing approaches for different age and life-cycle groups

Eg. HDFC Standard Life PENSION PLANS

Demographic Segmentation
Gender segmentation
Divides the market based on sex (male or female)

Hero Honda Pleasure

Demographic Segmentation
Income segmentation divides the market into

affluent or low-income consumers